CHIPMAKER NVIDIA UNDER INVESTIGATION OVER ANTITRUST CONCERNS

Over the past several years, the California-based company Nvidia has grown to become one of the largest companies on the planet.  Nvidia is known for making computer chips called “graphics processing units” or “GPUs” that power many computer programs—from video games to cryptocurrency mining and advanced AI models.  As of this writing, the company is valued at 2.8 trillion dollars.  And great size attracts attention.    

Recently, Nvidia has come under investigation over antitrust concerns.  In August, it was reported that Nvidia was under investigation by the United States Department of Justice or “DOJ.”  Details of the investigation are currently limited and the story continues to develop.  

Earlier this month the investigation took a peculiar turn.  On September 3, 2024, Bloomberg reported that Nvidia received a subpoena from the DOJ.  But the very next day, Nvidia denied that it had received a subpoena, prompting Bloomberg to report that it actually received a “civil investigative demand,” commonly called a “CID.”  

Subpoenas and CIDs are functionally very similar—both are requests for documents or information.  But whereas a subpoena is typically issued by a court or attorney during the course of litigation, a CID is issued by government agencies such as the DOJ or the Federal Trade Commission before a lawsuit has commenced.   

Bloomberg further reported that the CID appears to cover two issues.  First, the DOJ is inquiring into Nvidia’s acquisition of RunAI—a company that makes software for artificial intelligence.  According to Bloomberg, “there are concerns that the tie-up will make it more difficult for customers to switch away from Nvidia chips.”  Second, according to Bloomberg, the DOJ is probing “whether Nvidia gives preferential supply and pricing to customers who use its technology exclusively or buy its complete systems.”  In other words, the DOJ is concerned that Nvidia may be unfairly punishing its customers if they buy products from rival chipmakers, such as the company AMD.  Such an arrangement could lead to unnatural growth and market dominance.  Time will tell if the DOJ’s investigation ripens into an antitrust lawsuit.